By Brett Norman
Politico, March 14, 2013
Health care prices are too damn high.
That’s the punch line to the provocative Time magazine piece “Bitter Pill” by Steven Brill, who laid out his diagnosis of the problem Wednesday at a Center for American Progress panel.
He cited sky-high hospital executive salaries and operating margins, monopolistic and opaque pricing by providers and a fearsome lobbying force — many times larger than those of the oil and gas or defense industries — that has beaten policymakers into submission.
“The lap-doggery to the health care industry is bipartisan,” he said. The article has sent hospitals and other stakeholders to the wall in defense of the system, and it’s fueling debates in policy circles.
But while many policy experts agree with much of Brill’s diagnosis of factors that are driving up costs, there’s far less consensus on what to do about it.
Brill said the voluminous feedback he’s received since publishing the article breaks down along two lines. Conservatives believe consumers need to have more “skin in the game” — to pay more of health costs so they become more conscientious shoppers and put pressure on providers to more efficiently compete for their business. And liberals see the solution in Medicare-for-all, a single-payer system, amplifying the negotiating might the federal health care program already leverages to keep costs down.
Brill rejected the single-payer possibility as impractical in his article but now says that he is increasingly siding with that camp. “It’s sort of the cleanest way to clean up the system,” he said.
But two panel members, Ezekiel Emanuel, a senior fellow at CAP who advised the Obama administration on its health care law, and Giovanni Colella, CEO of Castlight Health, offered more market-oriented, all-payer alternatives.
Colella, whose company is dedicated to making health care costs and quality of different providers transparent and comparable, argued that better information will go a long way toward transforming the health care sector into a free market.
Emanuel argued that the public is unlikely to ever have good enough information to become selective health care consumers or, at least, is unlikely to act on that information. He pointed instead to payment reforms such as pilot projects included in the Affordable Care Act that pressure providers themselves to profit from becoming more efficient. And he said that he expects the growth of health care costs, which historically have far outpaced inflation, to level off with the growth in the rest of the economy by the end of the decade.
Brill believes that the federal health care law in general does little to control costs and will most likely drive up the cost of insurance because of new requirements for more robust coverage.
He gave little credence to the Beltway policy wonk goal of transforming the health care system away from paying for quantity of services provided to paying for health outcomes and the quality of care. He said similar efforts to move the legal profession away from billing by the hour and toward meeting performance benchmarks have either failed or proved more expensive.
“If I have to read another [former Office of Management and Budget Director Peter] Orszag article on fee-for-service, I will hang myself,” Brill said.